The government has released details on the charges that will be levied for food and drink goods entering the UK from abroad, raising concerns from trade experts about the likely effect on smaller businesses and the UK’s post-Brexit trade.
Yesterday (3 April), the Department for Environment Food and Rural Affairs (DEFRA) released the rates and details of the Common User Charge, which will apply to imports entering the UK through the Port of Dover or Eurotunnel, regardless of whether they are stopped for checks at the border control post (BCP).
The charge will apply to both EU and non-EU sanitary and phytosanitary (SPS) goods, and is part of the government’s Border Target Operating Model (BTOM) that is meant to deal with the UK’s post-Brexit trading regime.
The charges will come into effect when the second phase of BTOM is introduced on 30 April, though payments will not be made until at least 12 weeks later when the monthly invoices will be issued by DEFRA.
‘Worst concerns’
Reacting to the announcement of the charge, Marco Forgione, director general of the Institute of Export and International Trade (IOE&IT), said:
“With the announcement of the Common User Charge the worst concerns of SMEs in the UK and EU have come to fruition. While larger businesses have the capacity to absorb this cost, it will be small businesses that will feel the full force of these charges.”
“Up to an additional £145 per consignment might mean profit wiped out completely. Business might look to change the way that they import their goods, perhaps buying from a distributor once the goods are already imported. This would result in reducing the frequency of orders, increasing the price for the consumer and ultimately limiting the variety a of products available in UK shops and restaurants.”
Details
Forgione said that the additional costs could “ultimately make the UK a less attractive nation to trade with for smaller businesses in the EU”, pointing to a steady decline in UK SMEs trading with Europe as a result of additional barriers.
Charges are set per commodity line, with low-risk products of animal origin (POAO) having a £10 import charge, while medium- and high-risk POAO have a £29 import charge. POAO goods transiting GB will be subject to £10 transit charge.
Plant and animal products are treated separately, with plant-based goods not being charged the transit cost and no charges for low risk goods unless pre-notified on the import of products, animals, food and feed system (IPAFFS).
The charges would be limited to the first commodity lines on a common health entry document (CHED), meaning that the costs would be capped and the maximum cost would be £145 per consignment.
Charges on live animals have not yet been announced. DEFRA said it will review and update the rates annually, raising the possibility that these could increase from 2025 onwards.
UK’s trading status
IOE&IT customs and trade expert Anna Doherty said:
“As always, it is important to remember that the severity of this charge will be felt differently by large importers who are bringing thousands of pounds’ worth of goods at any one time, where the cost might be spread across a number of items and might not affect the landed costs that much.
“The story will be different for SMEs, where an additional £145.00 per consignment might mean a business’s entire profit is wiped out completely.”
“Additionally, importers of low risk POAO will also be liable for the payment of the Common User Cahrge even though such goods will not be subject to routine checks at the BCPs."
Doherty warned that this might cause a smaller business to change the way that they import their goods, perhaps buying from a distributor once the goods were already imported, echoing the thoughts of Forgione.
The Cold Chain Federation's CEO Phil Pluck told the BBC that the fee would have to be passed on to "either the EU importer, the smaller UK retailer, or the UK consumer".
